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Sarbanes Oxley : Technology : Risk Management
Beyond Risk Assessments
Top Considerations for Strong and Seamless Protection of the Online Channel
By
Dennis Maicon
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Dennis Maicon
EVPFinancial Services Solutions
Digital Resolve
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In today?s online banking landscape, securing customer transactions for the online channel is not only good practice for building customer loyalty and trust ? it is a critical part of operating in the digital world.
From fear of customer abandonment of the online channel to FFIEC compliance, financial services institutions are anxiously searching for solutions that will help them to meet a diverse array of issues that stem from conducting business online. Faced with a multitude of technology and solution choices, banks and credit unions need to be armed with the information that will help them to understand the risks associated with the online channel and to select solutions that best meet these risks.
When making risk assessments, financial services institutions should look at a number of factors, some of which address the traditional concepts of risk such as member segmentation and online activities, and some which address a different kind of risk: the risks associated with the introduction of new technology and its effects on online members.
There are five considerations that financial services institutions should weigh when investigating how to best provide strong member protection online, always keeping in mind the balance between security and the preservation of the normal customer experience.
1. Member Experience ? Financial services institutions need to move member experience to the top of their online fraud prevention checklist. While not a point in the FFIEC guidance, it is a point of common sense: disrupting the ease of use of the online channel with lengthy or cumbersome processes is not a good way to build loyalty with online users, nor a good way for credit unions to keep costs down. By deploying a transparent authentication solution, financial services institutions remove the customer from the authentication process and are able to keep security tactics off of fraudsters? radars.
2. Front Door Protection ? this consideration refers to keeping would-be fraudsters from ever gaining access to member accounts. Financial services institutions need to be wary of solutions that don?t authenticate users until after log in, and then look only for suspicious or risky transactions. While important to track activity once online, it is more imperative to employ real-time risk evaluations at login ? before a fraudster has the opportunity to view sensitive customer data. Think about it like this: would you rather lock your front door to keep thieves out, or would you rather let them in your house and take action only if they do something suspicious?
3. Member Segmentation ? not all customers are the same. Does the solution you are looking at provide options for further authentication of riskier member segments? Financial services institutions should look for solutions that offer multiple choices for user authentication so that they can select the method that best suits the security needs of diverse member segments.
4. Analysis and Forensics ? this is one of the most crucial parts of any fraud prevention solution, as it is the one thing that will continue to help banks and credit unions define and detect ? and defend against ? emerging fraud. Without a strong analytical component designed to make sense of the newfound information about a credit union?s online channel, there is no way to understand how well your solution is helping to lower fraud losses from the online channel.
When looking at risk for the online channel, look beyond traditional risk assessment factors and incorporate factors into the decision process that have the ability to affect you and your member base long after the completion of risk assessments.
Dennis Maicon
EVPFinancial Services Solutions
Digital Resolve
Dennis Maicon serves as Executive Vice President, Financial Services Solutions for Digital Resolve, the leading authority on transparent, risk-based authentication solutions for banks and financial services institutions.
Bringing 18 years of experience, Maicon is responsible for steering the company?s vision and strategy in the financial services industry, drawing on his experience from both the banking and technology industries, as well as from the time he has spent working in the corporate treasury function.
Previously, Maicon was senior finance manager at Arris Interactive, and also spent nine years at Suntrust Bank where he held a variety of positions from credit administration to cash management functions to vice president of International Corporate Banking.
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